Oracle Invokes ‘Force Majeure’ on Troubled ‘Project Jupiter’ AI Data Center
Oracle Corp. has issued a force majeure notice to Blue Owl Capital concerning Project Jupiter, a data center in New Mexico, citing potential delays tied to power commitments. The project, part of the Stargate AI build-out, has encountered regulatory hurdles including a denied energy permit and delayed natural gas pipeline. Oracle is aiming to secure a delay on rent payments if the data center is not operational by its 2028 target.
Oracle Corporation has issued a force majeure notice to Blue Owl Capital concerning "Project Jupiter," a major AI data center under construction in New Mexico, which is central to the broader "Stargate AI" infrastructure initiative. The contractual clause, typically invoked for unavoidable delays, suggests Oracle may seek to postpone rent payments if the facility is not operational by its planned 2028 completion, potentially securing a three-year delay on rental obligations.
While Oracle described force majeure notices as "commonplace" for projects of this scale and not indicative of an immediate delay, Blue Owl Capital asserted that the notice does not alter financial commitments and affirmed both parties remain "fully aligned" on Project Jupiter. The project, designed to handle 2.45 gigawatts of power, has encountered significant hurdles, including the denial of a crucial permit by New Mexico regulators for its energy resource plans.
Further complicating the timeline, a natural gas pipeline from Energy Transfer LP, intended to fuel the site's Bloom Energy Corp. fuel cells, has seen its service date pushed back by nearly six months to February 1, 2027, due to repeated rejections of its proposed route by the New Mexico State Land Office. The project has also become a political point of contention, with residents reportedly learning of Oracle and OpenAI's involvement only after its initial approval, prompting Oracle to launch a public outreach effort.
The financial implications extend beyond the immediate parties, with an $18 billion construction loan from approximately 20 banks tied to the project. Oracle's credit risk and stock performance have been impacted by the news, highlighting the high stakes in this large-scale AI infrastructure development, which includes a $400 billion deal between OpenAI, Oracle, and SoftBank for five US data centers.